in­dus­try pre­dic­tion

Four ways lo­gis­tics au­to­ma­tion will shape the ware­house of the fu­ture by Mr. Alain Kad­doum, Gen­eral Man­ager, Swiss­log Mid­dle East

Logistics News Middle East - - Contents -

Like many other in­dus­tries, au­to­ma­tion in the Mid­dle East is go­ing through a sig­nif­i­cant pe­riod of change, with a fo­cus on in­creased ef­fi­ciency. In or­der to be able to re­spond to these changes and re­main com­pet­i­tive, em­brac­ing in­no­va­tive tech­nolo­gies is now more im­por­tant than ever be­fore.

The pace of change has never been as fast as it is to­day, and those changes will ul­ti­mately in­flu­ence the ware­house of the fu­ture. From de­mo­graphic shifts to in­creas­ing ur­ban­iza­tion, and from drones to 3D print­ing, so­cial and tech­no­log­i­cal changes will put pres­sure on sup­ply chain and lo­gis­tics man­agers to move goods closer to con­sumers and de­velop ware­houses with the flex­i­bil­ity and speed to sup­port lo­cal, faster de­liv­ery through mul­ti­ple chan­nels.

The goods that make their way through sup­ply chains ul­ti­mately end up with con­sumers, and con­sumers not only drive de­mand but set ex­pec­ta­tions for de­liv­ery. By 2030, the om­nichan­nel jour­ney of a cus­tomer will move fur­ther, and the chan­nels might be even more di­verse than to­day. The global mar­ket for ware­hous­ing and lo­gis­tics ro­bot­ics reached nearly $2 bil­lion in 2016 and is pro­jected to ex­ceed

$22 bil­lion by the end of 2021. It is with­out a doubt that those com­pa­nies who in­vest in ro­bot­ics and au­to­ma­tion now will be bet­ter equipped to thrive in the com­ing years.

Like many other in­dus­tries, au­to­ma­tion in the Mid­dle East is go­ing through a sig­nif­i­cant pe­riod of change, with a fo­cus on in­creased ef­fi­ciency. In or­der to be able to re­spond to these changes and re­main com­pet­i­tive, em­brac­ing in­no­va­tive tech­nolo­gies is now more im­por­tant than ever be­fore. Tech­nolo­gies like the In­ter­net of Things, dy­namic en­ter­prise man­age­ment, global sup­ply chain vis­i­bil­ity, and ma­chine learn­ing are al­ready chang­ing the way man­u­fac­tur­ers pro­duce goods and in­ter­act with cus­tomers. Sev­eral tech­nolo­gies have a role to play. Cloud de­ploy­ment, ad­vanced ERP so­lu­tions, data sci­ence, pre­dic­tive an­a­lyt­ics, ma­chine learn­ing, smart sen­sors, and on­line por­tals all play a part.

Alain Kad­doum, Gen­eral Man­ager at Swiss­log Mid­dle East iden­ti­fies some pre­dic­tions in lo­gis­tics au­to­ma­tion that will shape the ware­house of the fu­ture.

Pre­dic­tion 1: ware­houses will move Closer To The Cus­tomer

Stud­ies show that 20 to 25% of con­sumers would pay sig­nif­i­cantly more to re­ceive items on the same day. Thus, the ware­house must move closer to cus­tomers it serves. 2019 will see a growth in ur­ban dis­tri­bu­tion cen­ters (ur­ban DC) that stage prod­ucts close to users within large cities to en­able faster de­liv­ery and a more seam­less omni-chan­nel ex­pe­ri­ence. The ob­vi­ous chal­lenge to this sce­nario will be the space lim­i­ta­tions and rel­a­tively high real es­tate costs in­her­ent in ur­ban mar­kets. This will dic­tate com­pact and ef­fi­cient ware­houses with lim­ited in­ven­to­ries that are op­ti­mized us­ing pre­dic­tive an­a­lyt­ics and sup­ple­mented with 3D print­ing.

Pre­dic­tion 2: 3d Print­ing will dis­rupt ware­houses

Sim­i­lar to many ware­houses to­day, the ur­ban DC will need to hold some in­ven­tory. How­ever, since space is lim­ited and prod­uct ranges are likely to con­tinue to ex­pand, this in­ven­tory will be lim­ited. Prod­ucts not avail­able in the lim­ited in­ven­tory may be 3D printed. This re­duces in­ven­tory re­quire­ments and al­lows the cre­ation of in­di­vid­u­al­ized prod­ucts. In prin­ci­ple, smaller items, and prod­ucts that are sold reg­u­larly would be held in stock. In­ven­tory size would be min­i­mized through 3D print­ing and use of big data to pre­dict be­hav­ior and dis­trib-

ute ar­ti­cles to the ur­ban DC just be­fore they are or­dered. Be­cause the ur­ban DC will sup­port mul­ti­ple sell­ers in a shared ser­vice model, this cre­ates the op­por­tu­nity to con­sol­i­date ar­ti­cles from dif­fer­ent sell­ers into one ship­ping car­ton to re­duce ship­ping costs and en­hance the cus­tomer ex­pe­ri­ence.

Pre­dic­tion 3: Pre-picked goods and Parcels will be Con­sol­i­dated for last-mile ser­vices

With the rise of e-com­merce, con­sumer pref­er­ences have be­come the cen­ter of at­ten­tion in the for­merly busi­ness-ori­ented par­cel de­liv­ery mar­ket. Large e-com­merce play­ers, as well as var­i­ous start-ups, have iden­ti­fied last-mile ser­vices as a key dif­fer­en­tia­tor amongst their com­peti­tors. In fact, the va­ri­ety of de­liv­ery op­tions and the per­ceived qual­ity of the de­liv­ery ser­vice are the ma­jor cri­te­ria’s for on­line cus­tomers and hence di­rectly im­pact e-com­merce play­ers’ suc­cess in the mar­ket­place.

The global e-com­merce rev­o­lu­tion con­tin­ues to fuel ris­ing de­mand for par­cel ship­ments around the world. For­rester Re­search pre­dicts a 10% year-on-year growth for on­line re­tail in Europe and the US. The pace is pick­ing up even faster in Asia; by the year 2020, the on­line re­tail mar­ket in China is pro­jected to be equal to that of France, Ger­many, Ja­pan, the UK, and the US com­bined. There­fore, to help busi­nesses drive ef­fi­ciency, cut costs and meet the last mile de­liv­ery chal­lenge, new tech­nolo­gies are steadily be­ing in­tro­duced. These range from drones and au­tonomous ve­hi­cles to ro­bot­ics, au­to­ma­tion, and smart tech­nol­ogy. In­no­va­tions such as elec­tric vans, par­cel lock­ers, and smart door locks, have gone from pi­lot test­ing to be­ing de­ployed at scale. Over the next few years, the de­ploy­ment of these tech­nolo­gies will rise.

Pre­dic­tion 4: mo­bile Ro­bot­ics will be­come The norm

As e-com­merce and on-de­mand econ­omy con­tinue to grow world­wide, a new gen­er­a­tion of au­tonomous mo­bile ro­bots will be in­tro­duced to help com­pa­nies tackle ma­jor la­bor chal­lenges posed by this rapid ex­pan­sion and de­mand. This new gen­er­a­tion of mo­bile ro­bot­ics will be con­fig­ured to sup­port same-day de­liv­ery, or cus­tomer pickup through a com­bi­na­tion of au­tonomous ve­hi­cles, ro­botic pick­ing and load­ing, drones and mo­bile pickup points.

This type of tech­nol­ogy will play a sig­nif­i­cant role in de­liv­er­ing the speed and ef­fi­ciency re­quired and au­tomat­ing the move­ment of prod­ucts from large re­gional ware­houses to the ur­ban DC while en­abling faster pick­ing, load­ing, and de­liv­ery of these prod­ucts.

Sup­ply chain man­agers are al­ready deal­ing with a myr­iad of tech­nol­ogy and mar­ket changes as they im­ple­ment mod­u­lar, au­to­mated so­lu­tions to in­crease pro­duc­tiv­ity and through­put in their ware­houses. How­ever, the changes oc­cur­ring in so­ci­ety, with more dis­pos­able in­come and higher con­sumer ex­pec­ta­tions, may stretch ex­ist­ing dis­tri­bu­tion net­works be­yond their abil­ity to adapt.

The so­lu­tions emerg­ing to­day in terms of au­to­mated guided ve­hi­cles, au­to­mated pick­ing and in­tel­li­gent, mod­u­lar soft­ware pro­vide the speed and flex­i­bil­ity to sup­port these core ca­pa­bil­i­ties and will con­tinue to evolve to meet the de­mands of the fu­ture.

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